Economy

Bridgestone Bandag Tire Solutions has instituted a 12% price increase on its Bridgestone and Firestone brand radial truck and bus tires....“Unfortunately, severely escalating raw material costs, as well as energy and other costs related to manufacturing, have made a price increase of this level unavoidable,” says Kurt Danielson, president of Bridgestone Bandag. “We remain committed always to provide a premium package of quality and value to our customers.”

The Federal Reserve could debate extending its bond-buying program beyond June if U.S. economic data proves weaker than expected, Kansas City Fed President Thomas Hoenig said. Another round of bond buying "may get discussed" if the numbers look "disappointing," Hoenig told Market News International in an interview published on Tuesday.

In addition to Egypt, the people have taken to the streets to varying degrees in Algeria, Jordan, Libya, Morocco, and Yemen. Local food riots have even broken out in rural China and other Asian locales. While the mainstream media focuses on the political aspects of this turmoil, they are overlooking the impact of rising inflation, driven mainly by record food prices. For example, former Bush advisor Dan Senor notes that Egypt is the world’s largest wheat importer. Yet because of skyrocketing prices, Egyptian inflation is now over 10 percent, while some experts estimate that Egyptian food inflation has risen as much as 20 percent. So I have to ask this tough question: Is Ben Bernanke’s ultra-easy QE2 money pump-priming partially to blame?

The S&P GSCI Total Return Index of 24 raw materials gained 3.1 percent in January and rose for a fifth month, the longest streak since 2004, according to data compiled by Bloomberg..... Commodities have beaten stocks for three months, the longest stretch since June 2008, after the Federal Reserve pledged to buy $600 billion of Treasuries and demand for clothes and food lifted cotton, cocoa and copper.

South Carolina Gov. Nikki Haley said Tuesday she's asking legislators to overhaul the state's medical malpractice laws and cut reimbursement rates for doctors to deal with a $228 million deficit in the state's Medicaid health care system.

Hundreds of nursing homes across Texas warn they’re at risk of closing if state lawmakers don’t change the proposed 33 percent cut from Medicaid-funded nursing care. Like at many nursing homes, more than half of the residents at the Autumn Winds Retirement Lodge in Schertz rely on Medicaid. If the state cuts reimbursements, the out of pocket expense many patients will have to pay will likely go up, and owner Darlene Evans said that could force some residents out. "Many of them have used their private resources to fund a stay of 5-10 years, and they have exhausted those resources and now depend on the state,” she explained.

To close a $487 million deficit, her plan calls for at least 1,075 layoffs on a county payroll that counts 23,700 employees, refinancing the county’s debt and more aggressively going after unpaid taxes, including from businesses that are not paying county cigarette taxes.

Gov. Mark Dayton said Monday that his proposal to balance the state's projected $6.2 billion deficit contains "terrible cuts" that will have "devastating effects" for some of the state's poorest residents. "I hate what I'm having to do," Dayton said at a Minneapolis event organized by the Downtown Congregations to End Homelessness.

DPL's budget stands at around $50 million this year, and Mondowney said in her memo the system may face a $17 million deficit. She also said the Detroit Library Commission authorized a plan for layoffs and furloughs, which will require negotiations with individual labor unions.

Class sizes couldgo up. Some programs, such as summer school or programs for the gifted, could be scaled back. And new textbooks could wait a year. All of those are options as Omaha Public Schools look to make budget cuts next school year. District administrators are seeking to make cuts totaling $22.2 million, including $11.1 million from programs funded by federal stimulus money that runs out after this year.

new analysis released Monday showed that Wisconsin’s budget could be between $79 million and $340 million short by June 30 due largely to anticipated Medicaid expenses and a court-ordered repayment to a fund that was raided four years ago. Gov. Scott Walker has said he will begin outlining how he intends to deal with the problem in his first State of the State speech Tuesday. Walker has said he wants to take immediate action not only to deal with the problem this year but also start making savings to lessen the ongoing projected two-year shortfall of roughly $3.2 billion.

We're talking about Idaho's roughly 1,800 roadway bridges. And it really doesn't matter if you're cruising the interstate, trucking down a mountain road, or fighting busy city traffic, the safety of those bridges is probably an important factor for you. Yet, due to hundreds of millions of dollars in state budget shortfalls, the safety of those bridges could be questionable. The reason: in just a few short years, about 600 of Idaho's bridges will reach the end of their life span. What's more, the Idaho Department of Transportation says they'll need massive amounts of money and time to fix them.

U.S. unemployment will stay high "for some time," in part because changes in the labor market have made it tougher for those out of work to find jobs, a Federal Reserve Bank of Cleveland economist said on Monday....Some policymakers have suggested that structural changes in the economy have created a mismatch between the skills that job-seekers have and those that employers want. The upshot, these policymakers say, is that the ability to influence the unemployment rate via monetary policy is limited. Minneapolis Fed President Narayana Kocherlakota has suggested the "natural" rate of unemployment, long pegged at 5 percent, could now be as high as 8 percent.

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"The Federal Reserve has passed China as the leading holder of U.S. Treasuries, according to the Financial Times, even though the central bank is only halfway through its second round of quantitative easing.

Based on weekly data, the New York Fed's holdings of Treasuries in its System Open Market Account total $1.108 billion. The holdings include bills, notes, bonds and Treasury Inflation Protected Securities, the FT reports.

"NEW YORK -(Dow Jones)- The net notional amount of derivatives used to hedge or speculate against a default on U.S. government debt rose 12% in late January, according to Depository Trust & Clearing Corp. figures updated as of Tuesday.

The move suggests investors are becoming more nervous about the quality of U.S. debt, and threatens to cast a pall over the notion that Treasurys are risk- free assets investors should run to for safe haven from other instruments."

"Even as banks are restarting the engines of their long-dormant commercial real-estate lending shops, old loans continue to fall into default faster than they can be worked out, with the delinquency rate for commercial mortgage-backed securities reaching a new high last month.

The missed-payment rate for all U.S. CMBS hit a record 9.34% in January, according to figures of research firm Trepp LLC.

"I think people at this point would have expected it to level off a little bit more," says Manus Clancy, managing director of Trepp. "

"NEW YORK (CNNMoney) -- Interest payments on the national debt could total $5.5 trillion over the next decade, or about 79% of the new debt estimated to accrue between 2012 and 2021.

And that's the optimistic scenario.

"Interest payments on the debt are poised to skyrocket over the next decade," the nonpartisan Congressional Budget Office wrote in its most recent budget outlook report.

The CBO -- and everyone else for that matter -- assumes that interest rates will rise. Just how quickly is the question. The CBO assumes a gradual rise, and projects that the 10-year Treasury rate won't hit 5% before 2015, up from an average of 3.2% today. "

10.16pm There's been record wave height - 9.5m - this afternoon off Townsville. "This is the highest that has ever been recorded since measurements began in 1975," Premier Anna Bligh said. Similarly in Cardwell we are planing for a storm surge of over 7m over the high tide mark, Lucinda Beach 4m and at Cairns 2.6m.''

10.50pm Police report a person at Innisfail has called them, asking to evacuate. Emergency workers cannot respond, other than give advice on sheltering, police say. "These are not conditions in which we can send out emergency workers," Premier Anna Bligh said this evening. "These are not conditions where you can put up a helicopter to do a winch rescue. All of that is now beyond the realm of possibility."

10.39pm Across North Queensland, more than 61,000 homes are without power.

11.34pm Queensland Premier Anna Bligh says reports of an 18m wave at Townsville are false. Waves breaking over a buoy have turned it upside down, causing it to give inaccurate measurements.

11.39pm More on the call to police for evacuation assistance: Six people in their 60s at Port Hinchinbrook in a storm surge area made the call, and have been given telephone support.

11.41pm Premier Anna Bligh says people in affected areas may need to be self sufficient for a couple of days. She said she wouldn't "sugar coat" the difficulties ahead for far north Queenslanders. "We will do everything in our power to minimise that time but that's not in our control, it will depend on conditions, if we can get helicopters up and how badly damaged roads are." Her warning comes as 89,000 homes have had power cut. At her last media update for the evening she said: "We are waiting anxiously with you ... we hope that you can feel our thoughts. We hope to see you safe and well tomorrow morning."

12.43am Cassowary Coast councillor Ross Sorbello said his house was shaking under the force of winds of up to 290km/h. "We're already at a stage where it's worse than it was during Larry. I don't remember the house shaking like that last time," he told AAP. "The wind and rain outside are howling, it's a horrible sound."

1.40am Boyd "Scotty" Scott, of Scotty's Beach House at Yasi "ground zero" Mission Beach, has told Sky News after the cyclone crossed: "I'm looking at stars aboveme, that's how calm it is ... At the moment, I don't feel it's been that much different to Larry."

2.10am Townsville authorities say there is no way of knowing how many homes will be inundated as a result of an expected record storm surge as cyclone Yasi belts the north Queensland coast. A wave height of 9.5 metres had been recorded at the city, almost three metres above the expected level, but authorities will not be able to determine the effects of the storm surge until after the cyclone has passed.

4:25am Queensland Police have received widespread reports of widespread damage and destruction but no reported injuries or deaths so far. Related Coverage Flood levy: 'Will just pass'

4:10am Cyclone Yasi has been downgraded to category 4 and is expected to weaken, according to the latest Bureau of Meteorology report.